On December 26, 2004, an earthquake and tsunami struck off the western coast of Sumatra, Indonesia. This tsunami and another in March 2005 caused massive flooding in the coastal areas of Aceh and North Sumatra Provinces, with an estimated 134,000 deaths and losses of almost $5 billion, about 97 percent of Aceh’s GDP.  Thousands of micro- and small enterprises (MSEs) were destroyed or damaged. Prior to the disaster, microfinance institutions were virtually absent in Aceh Province as a result of three decades of civil conflict. After the tsunami, the demand for microfinance was high.